UK property tycoons unmasked in government bid to avoid tax evasion

The government is planning to crack down on offshore companies buying property to launder money and evade tax.

Following the Panama Papers scandal, offshore companies who purchase UK property could be forced to reveal the owner’s identities in a government bid to crack down on money laundering and tax evasion.

David Cameron will be forcing UK companies to divulge the true nature of their ownership under new government plans for a register of beneficial ownership.

The register, which will come into effect in June, will bring foreign owners into line with the UK rules and regulations.

In effect, this register will mean that property owners can no longer hide behind anonymous shell companies.

The consultation document, published by the Department for Business, Innovation and Skills, stated that:

“Property can provide a convenient vehicle for hiding the proceeds of crime. A recent study found that a quarter of solicitors’ firms surveyed had experienced clients attempting to use property transactions to launder money or commit fraud.

“UK property is in any case attractive to overseas investors due to the UK’s stable and open political and business climate. This also attracts criminal organisations and corrupt individuals who want a good investment and may also seek the badge of wealth and respectability that UK property ownership can bestow. The high values of property in London, in particular, presents an opportunity for criminals to launder considerable sums of money in one transaction.”

Last year, the Metropolitan Police and Anti-corruption groups revealed that £180 million worth of offshore-owned property has been under investigation for money laundering, corruption and stolen capital over the last decade.

Detective Chief Inspector, Jonathan Benton, head of operations at the Met’s proceeds of corruption unit stated:

“In nearly all the grand corruption cases we investigate, we find what we suspect is proceeds of corruption being used to purchase high-value properties.”

Just one example of London property used to launder money through corruption is the case of former governor of Delta state in Nigeria, James Ibori, who was charged with money laundering and corruption in 2012.

Following the Panama Papers leak, Cameron’s own finances have come under scrutiny. It recently emerged that he had previously invested in and profited from his father’s offshore assets, who was a client of Mossack Fonesca.

After calls for his resignation, protests and multiple statements about his late father’s offshore firm, Cameron admitted benefitting from the account, subsequently stating:

“I will be publishing the information that goes into my tax return, not just for this year but the years gone past because I want to be completely open and transparent about these things”.

On Sunday, he published his tax records in a bid to defuse widespread criticism.

Due to mounting political pressure over tax fairness, Cameron is also holding a global anti-corruption summit next month, where he is expected to announce the new transparency measures for UK property owners. 



Melanie Luff

About the author

Mel wrote for all titles in the Dynamis stable including BusinessesForSale.com, FranchiseSales.com and PropertySales.com as well as other global industry publications.

@Be_TheBoss

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